Lebanon’s luxury market hard hit by travel warnings by GCC countries
Gulf Arab countries have issued a travel warning for Lebanon, telling their citizens to avoid what is a popular tourist destination for the region after a spillover of violence from neighbouring Syria. Sectarian violence fuelled by Syria’s civil war has broken out in the northern Lebanese city of Tripoli and, last month, two rockets fired at southern Beirut, controlled by the Shi’ite Hezbollah militia, brought the violence deeper into Lebanon. On Wednesday, Syrian government forces backed by Hezbollah fighters seized control of the Syrian town of Qusair, near the Lebanese border.
With almost 40% of luxury retail sales and hospitality depending on travellers from the GCC, this could be the beginning of a new downfall for the already over-saturated luxury market in Lebanon. Many of the wealthy Lebanese still make their shopping for luxury brands abroad, especially Europe. The luxury residential real estate market is also likely to take a hit, with housing estimated to drop by 30% by the end of this year.
With the exception of Louis Vuitton, most luxury fashion brands operate in franchising, therefore, the burden being carried mostly by the franchisees. Prada, Ralph Lauren and Valentino are among the major luxury brands which have delayed their entry into the Lebanese market with mono-brand stores - all being currently represented through multi-brand stores.